One of the concerns of modern businesses is to get an improved revenue through excellent customer experience programs. The quest for an enhanced customer experience will usually make businesses and brands initiate cutting edge practices to drive amazing customer experiences. These positive experiences are usually meant to improve customer loyalty and retention for sustained revenue.
Customer retention is a key to businesses. It is very important for companies that spend a lot of marketing dollars for generating and converting leads. Failure of businesses to engage in customer retention practices could lead to loss of customers and marketing budget. According to expert reviews, it cost about 10 to 25 more to get new customers compared to trying to retain your old customers. Moreover, it has been proven that a 5% rate of customer retention can lead to between 25% and 90% in increased profit.
Understanding customer retention from the perspective of a modern brand
Simply, customer retention is any strategy, activity, or action of a company that is intended and conducted to keep old customers. It is also a strategy that prevents your customers from moving to your competitors. The strategy also triggers your customers to spend more on your products and services.
A simple objective of any customer retention strategy is to improve and consolidate customer relationships. This can be done through customer loyalty initiatives and programs.
Core features of a customer retention strategy
Most companies design their customer retention strategies to revolve around certain key metrics. These are:
1). Number of available customers
2). Quantity of customers that are buying high-priced goods
3). Available money is needed to improve customer loyalty.
4). Your ability to endure customer churn.
How businesses measure their customer retention rates
Customer retention is a continuous part of a business marketing strategy. It is not just a single activity. Calculating this value gives the customer retention rate. It usually needs constant tracking and monitoring to create effective results. To measure your customer retention, you will have to identify the following parameters within a sales period:
- The total quantity of customers you have at the end of the period.
- The total quantity of customers you have at the beginning of the period.
- The total quantity of new customers that were acquired within the period.
To obtain your retention rate subtract the number of new customers you got from the total quantity of customers at the end of the said period. The result should be divided by the total quantity of customers you have in the beginning. You should then multiply this number by a hundred. This gives the retention rate.
Proven strategies to increase customer experience
1). Prioritize customer service: If you want your customers to stay loyal to your business, you will need to prioritize their needs. This could mean timely social media responses or quality offline experiences.
2). Reward customers: Everybody likes a reward. Rewarding your customers is one of the best ways to improve retention. Your customer loyalty program should be ideally curated to reward your customers.
3). Ask customers for advice: Your customers feel more important and valued when you ask them for advice.
4). Consult customer engagement companies: These are customer insight and research providers that will help you study your customer base and help curate effective strategies to help you retain your customers.
They can also help you track your customer retention strategies. Leading research providers like OvationMR do this easily. OvationMR offers customer experience measurement and tracking to help increases and maintain customer loyalty and retention.